Debt limit to decrease
US Treasury Secretary Yellen warns of bankruptcy
01/13/2023 11:42 PM
And it “revives” bankruptcy annually. Treasury Secretary Yellen warns that the US debt ceiling is approaching and must be raised or eliminated. Otherwise, the government is threatened with default again from the summer. The consequences will be dire.
US Treasury Secretary Janet Yellen has warned of an imminent failure of the US government. In a letter to the US Congress, she called on lawmakers to raise the debt ceiling or suspend it altogether. Otherwise, the debt ceiling already in place will be reached on Jan. 19, Yellen wrote. After that, she added, the Ministry of Finance will have to take “extraordinary measures” so that it can continue to guarantee the government’s solvency.
Specifically, investments in certain public pension funds are affected. As a result, the default could be delayed until the beginning of June, the letter said. The debt limit to date is around 31.4 trillion US dollars (about 29 trillion euros). Yellen warned that default would irreparably harm the US economy, the livelihoods of American citizens, and the stability of the global financial system.
White House spokeswoman Karen Jean-Pierre warned Congress that raising the debt ceiling is not negotiable. And she stressed that the White House “will not conduct any negotiations” on this issue. There has always been bipartisanship on raising the debt ceiling, she said, “and that’s just the way it should be.” “He should not be a political pawn.”
Republicans want something in return
In the past, the prospect of imminent default had real consequences. In 2011, the newly elected Republican majority in Congress delayed raising the debt limit. As a result, the credit rating of the United States was downgraded for the only time in history.
The statements of senior Republicans in the US House of Representatives raised fears that such a confrontation could happen again. Newly elected House of Commons Speaker Kevin McCarthy said Thursday: “We need to change the wasteful way money is spent in this country and we’re going to make sure that happens.” Since the beginning of January, Republicans have had a very slim majority in the House of Representatives, with which they can prevent an increase in the debt limit.